FactChecking the North Carolina Senate Race

The North Carolina Senate race pits incumbent Democratic Sen. Kay Hagan against Republican challenger Thom Tillis. While the two campaigns have aggressively attacked each other, they’ve had a lot of help from outside supporters as well.

So far, the race has attracted at least $37 million in spending by outside groups, the most of any fall contest, according to a Sunlight Foundation analysis of Federal Election Commission data. Of that amount, more than $25 million has been spent on attack ads — more than $6.5 million against Hagan and nearly $19 million opposing Tillis.

Hagan and her allies have gone after Tillis’ record on taxes and education spending as North Carolina state House speaker, and have accused him of supporting policies they claim will undermine Medicare. Meanwhile, Tillis and his backers have attacked Hagan for consistently supporting President Obama and his policies, including the Affordable Care Act.

Claim:As state House speaker, Tillis “cut $500 million” from the state’s education budget.

Facts: This is not true. Total state spending on education increased by more than $700 million from 2012-13 to 2014-15. However, spending hasn’t kept pace with enrollment, and a state agency determined that education funding was $368 million less than it would have been if adjusted for enrollment increases. But it’s not $500 million, and it’s not a “cut.”

This is one of the most frequent charges made in ads against Tillis. Meanwhile, Tillis says on his website that education funding is up $660 million since he was elected House speaker in 2011. Who’s right depends on how one defines “education” — just K-12 public school funding, or also community college and university dollars — and how one defines “cuts.”

Every year, the state puts out a so-called “continuation budget” that projects the expense of keeping programs and salaries at current levels. The continuation budget accounts for such factors as student enrollment, rising average teacher salaries and the changing cost of gasoline for buses. In 2013, the continuation budget called for $23.6 billion in total education spending over two years. The Republican-controlled state Legislature passed a budget that included $23.1 billion, thus falling nearly $482 million short of the two-year continuation budget. The state education budget grew in raw dollars — from $11 billion in 2012-2013 to nearly $11.8 billion in 2014-2015 — but just not as fast as deemed necessary to maintain the current level of service. But even if one considers that to be a “cut,” the $500 million figure used in ads attacking Tillis is outdated. In 2014, Tillis supported a budget adjustment that added in more education funding in the second year, so the funding gap ended up being $368 million.

Two ads we reviewed also left the false impression that $500 million was cut from K-12 public schools. But the $500 million figure includes funding for community colleges and universities. The two-year combined difference between the continuation budget and the enacted budgets under Tillis was $121 million for K-12, not $500 million. On the other hand, Eric Moore, a fiscal analyst in the state’s Department of Public Instruction, explained to us that increased state spending on benefits, coupled with growing school enrollment, has cut into classroom spending even though education spending has increased.

Claim:Hagan “supported a carbon tax” that would destroy “up to 67,000 jobs in North Carolina over the next ten years.”

Facts: Congress has never voted on a specific carbon tax proposal. Both the Tillis camp and the American Energy Alliance point to Hagan’s March 2013 vote against an amendment sponsored by Republican Sen. Roy Blunt to require 60 votes to approve any potential carbon tax in the future.

The amendment failed. But it wasn’t a vote for a carbon tax; it was a vote against a nonbinding resolution requiring a high threshold for passing such a tax at some unknown point in the future.

Furthermore, there was no proposal that would have “destroy[ed] up to 67,000 jobs in North Carolina” over a decade, as Tillis’ campaign says. Instead, that number comes from the National Association of Manufacturers analysis of two scenarios, and it’s the upper-most estimate for NAM’s high-end scenario. Technically, NAM didn’t say up to 67,000 jobs would be lost. Its figure is for reduced labor income. NAM notes: “This does not represent a projection of the number of workers who may need to change jobs and/or be unemployed, as some or all of the lost labor could be spread across workers who remain employed.”

Facts: This false claim is based on a misreading of an analysis of a 2013 tax plan backed by Tillis and other state Republican leaders.

A pair of Senate Majority PAC ads cites an analysis by the Institute on Taxation and Economic Policy for the left-leaning Budget and Tax Center as the source of the claim. But that’s not what the Budget and Tax Center report says. Rather, it states: “Accounting for the expiration of the state EITC [earned income tax credit], the bottom 80 percent of taxpayers, on average, will see their taxes increase under the tax plan compared to current tax law.” The key phrase in there is “on average.” Not all. For example, just looking at income tax ramifications, the report found that the bottom 20 percent of taxpayers — people making less than $19,000 — will see an average tax increase of $2 per year. Breaking that down, among those in the bottom quintile, 29 percent will see a tax increase (and among them the average increase is $121), but 32 percent will see a tax decrease (an average of $103).

Meg Wiehe, state tax policy director for the Institute on Taxation and Economic Policy, said that, based only on the income tax portion of the changes, about 35 percent of North Carolinians would see a tax increase, another 16 percent would see no change, and roughly 49 percent would get a tax cut. Once you factor in the sales tax increases included in the plan, Wiehe says, “it’s safe to say a majority of taxpayers will pay more under this plan.” But not 80 percent.

Claim: A Senate Majority PAC ad is “false” for saying that two of Tillis’ former top aides had inappropriate relationships with lobbyists, later “resigned,” and then were “rewarded” with “taxpayer-paid bonuses.”

Facts: This claim was made in an ad defending Tillis. However, we found the Democratic super PAC’s account to be accurate.

The Senate Majority PAC ad refers to Charles Thomas and Amy Hobbs, who worked as Tillis’ chief of staff and policy adviser, respectively. Both Thomas and Hobbs resigned less than a week apart in 2012, accordingtonewsreports, after their intimate relationships with lobbyists became public. Both aides, together, reportedly received more than $19,000 in severance pay from the speaker’s office “in lieu of notice” after resigning.

The Tillis campaign said the super PAC’s ad “is false because it failed to note that Speaker Tillis forced them to resign and it is wrong in saying he ‘rewarded’ them with bonuses. He did no such thing — it was severance in conjunction with their forced resignation.” But neither point makes the attack ad “false.” Even Tillis himself had previously described his former staffers’ departures as resignations and not firings. In the case of Hobbs, Tillis reportedly asked for her resignation, according to WRAL-TV in Raleigh, and Tillis told the News & Observer that Thomas “verbally offered his resignation,” which he accepted.

It also isn’t necessarily “false” to say that Tillis “rewarded” Thomas and Hobbs with “taxpayer-paid bonuses.” That’s a judgment call. Some may see it that way and others may not. The fact is that, combined, Tillis’ office gave Thomas and Hobbs more than $19,000 as pay “in lieu of notice,” which was not required, according to local media reports.

Claim: Hagan supported a health care law that would cause more than 2 million people to “lose their jobs.”

Facts: According to the Congressional Budget Office, changes due to the Affordable Care Act will cause 2 million people to decide not to work, or to decide to work less – but it will not cause them to “lose their jobs.”

A Tillis ad attacking Hagan cites a February report by the CBO on the labor market effects of the Affordable Care Act. The CBO estimated a reduction in full-time-equivalent employment of about 2.3 million by 2021. But the drop is “almost entirely” due to a reduction in “the amount of labor that workers choose to supply.” The report specifically noted that the reduction in the workforce is not due to “an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).” The law will give some Americans the ability to voluntarily leave their jobs or cut back their hours without fear of losing health insurance.

Furthermore, CBO Director Douglas Elmendorf explained that an additional part of the reason for the contracting of the labor force was due to the ACA subsidies providing a “disincentive” for some low-income people to work, or to work more hours, lest they lose health care subsidies.

Claim:Hagan is “teaming up with Barack Obama to take over the mortgage industry.”

Facts: This is a huge stretch. In fact, the bipartisan legislation in question is an attempt to roll back the government’s involvement in the insurance industry.

This claim, featured in an ad from the 60 Plus Association, a conservative advocacy group, is based on a bipartisan effort in the Senate to restructure the housing finance market and wind down Fannie and Freddie. The plan, supported by the White House, would replace Fannie Mae and Freddie Mac with a new agency, the Federal Mortgage Insurance Corp. The idea is for the FMIC to function similarly to the Federal Deposit Insurance Corp., with the new agency acting as a backstop guaranteeing mortgages, but requiring that the first 10 percent of losses is absorbed by private capital.

Does that amount to a government “takeover” of the mortgage industry? Not compared with the way things work today.

As Politico put it in an article cited in small print in the ad, the plan, sponsored by Senate Banking Committee Chairman Tim Johnson and the panel’s top Republican, Mike Crapo, “represents a centrist approach in which the government will still play a role in supporting the mortgage market but less of one than it does today.”

Claim: Tillis “supports a plan that would end Medicare as we know it and raise premiums.”

Facts: This claim from a Senate Majority PAC ad refers to Rep. Paul Ryan’s plan to overhaul Medicare. But Ryan’s plan wouldn’t end the guarantee of Medicare benefits. Instead, it proposes phasing in a government-subsidy program in which future beneficiaries pick from private plans or traditional Medicare.

The ad features a young man making this claim to his grandmother, telling her: “Tillis is bad news, grandma.” But Ryan’s plan wouldn’t change the current Medicare system for those who are at or near retirement.

On top of that, it’s not even clear whether Tillis supports Ryan’s Medicare plan. He backed the 2012 budget plan but was quoted by CNN in May as saying on the Medicare proposal, “I haven’t studied it to the position where I can really give you a well-informed response.” Tillis is not in Congress, so he has no record of voting for or against the Ryan plan.

Claim: Tillis “supports a plan that could end up costing seniors $1,700 more every year for prescription medicine.”

Facts: Again, this claim refers to Ryan’s Medicare plan, on which Tillis has not taken a position.

It’s true that some seniors could pay that much — or more — under the Ryan plan, because their Medicare drug spending reaches and surpasses the “doughnut hole” gap in coverage. The Ryan plan calls for repealing the Affordable Care Act’s gradual closing of that gap in coverage. But relatively few seniors reach the gap, and even fewer surpass it. The majority of those on Medicare wouldn’t pay $1,700 more for their prescriptions.

In fact, 12 percent of the 35.7 million seniors with Part D drug plans reached the gap in 2013 and received discounts under the Affordable Care Act. And statistics from 2011 indicate that less than 2 percent of all those on Part D plans completely spanned the gap and did not receive a low-income subsidy, which effectively covers costs in the gap. That’s slightly more than 500,000 people who would have fully borne the costs in the doughnut hole, according to a March 2014 MedPAC report to Congress.